Erlanger Expects $5 Million Profit Despite "Very Challenging" Budget

  • Monday, May 22, 2017

Erlanger Health System officials said they expect a $5 million profit for the upcoming fiscal year despite a "very challenging" budget.

Britt Tabor, chief financial officer, said there will be continued top line growth, which has brought a 51 percent rise in patient revenue over the past five years.

"This is organic growth. It's not from mergers or acquisitions," Mr. Tabor told members of the Erlanger board's finance committee on Monday night.

Admission growth is projected to be 10 percent, which officials said "significantly exceeds industry expectations."

Henry Hoss, finance committee chairman, said he worried about the pace of the growth. CEO Kevin Spiegel said the administration is managing it well, including ramping up staffing where appropriate.

Mr. Spiegel said before the recent major investments in the Erlanger campus there had been 15 years in which there were very few upgrades.

He said, "We have the financial acumen to manage this growth. I don't think you had this in the past."

The budget includes $45.8 million in capital spending - pushing the total up to $216 million since fiscal year 2015.

Mr. Tabor said, "Erlanger management has a proven track record of managing multiple capital projects and will continue to execute on those construction projects to ensure they are on time and on budget."

The budget includes $7 million for employee pay adjustments. That is on top of $20 million in pay increases over the past three years.

The level of uncompensated care is projected to reach $110 million in fiscal 2018.

Mr. Siegel noted this is the last year of major cash payments on the EPIC medical records system. Year 1 was $13.3 million, Year 2 was $33 million and Year 3 was $26.3 million. It is set to go live on Nov. 1 for the five hospital campuses. The old system will continue online through next June 30.

Net patient revenues are computed at $933 million with $42 million in other revenue.

Total expenses are tabbed at $962.7 million.

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